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									             Materials Prepared
                    for the



  Bethlehem Area School District
      Tax Study Commission

               October 30, 2006


ACT I ANALYSIS - DATA REQUIREMENTS
                 Prepared by

            Stanley J. Majewski, Jr.
        Assistant to the Superintendent
        For Finance and Administration
                             Table of Contents


Tax Study Commission - Act I Analysis                               Page

District Revenue from Current Taxes………………………………………………...             3

Demographic Information of the School District……………………………………. 5 - 6

Allocation of Potential Gaming Revenue……………………………………………. 8 - 9

Calculation of EIT Increase and Homestead Exclusion……………………………... 11 - 13

Earned Income Tax (EIT) vs. Personal Income Tax (PIT)………………………….. 15 - 18

Hypothetical Taxpayer Analysis…………………………………………………….. 20 - 31

Summary / Conclusions………………………………………………………………                        33




                                        1
DISTRICT REVENUE FROM CURRENT TAXES
                   Historic and Present District Revenue from Current Taxes

                                                                                                    Fiscal Years 2001 through 2006

                                                                    2000-01           2001-02          2002-03         2003-04         2004-05       2005-06 (1)
Property Tax
            Millage Rate:                                                28.07            29.90             32.66           33.70            34.59          35.58
            Assessed Valuation:                                  2,389,637,900    2,431,636,950     2,489,381,000   2,538,712,250    2,583,851,100   2,595,106,600
            Total Collections (Current & Interim)                   64,376,759       68,893,708        77,529,000      82,266,899       86,053,390      90,499,138

Earned Income Tax
            Tax Rate:                                                     0.50%             0.50%           0.50%           0.50%           0.50%           0.50%
            Total Collections:                                        8,335,866         8,751,891       9,197,531       9,321,009       9,591,017       9,980,379

Other Taxes
            Total Collections:                                        6,813,227         7,283,582       7,766,655       9,751,059       9,660,650         9740170

TOTAL LOCAL TAX REVENUE:                                            79,525,852         84,929,181      94,493,186     101,338,967     105,305,057    110,219,687



Total District General Fund Revenues:                              115,856,022        121,582,578     132,505,491     141,571,013     150,920,202      158827709

Percentage of District Revenues Provided by Local Taxes:                68.64%            69.85%           71.31%          71.58%          69.78%         69.40%


Source: Pennsylvania Department of Education, unless otherwise noted.

            (1) Unaudited estimates provided by School District officials.




                                                                                  3
DEMOGRAPHIC INFORMATION
 OF THE SCHOOL DISTRICT
                                 Demographic Information of the School District
                                                (U.S. Census Bureau Data - 2000)

                              Bethlehem    Bethlehem    Freemansburg      Hanover       Fountain Hill        TOTAL
                                 City      Township       Borough         Township        Borough        SCHOOL DISTRICT   Percent
AGE
      Under 5 years:               3,865        1,195           142               567             237           6,006       5.53%




                                                                                                                                     26.12%
      5 to 9 years:                4,262        1,540           114               625             289           6,830       6.29%
      10 to 14 years:              4,272        1,650           121               744             302           7,089       6.53%
      15 to 19 years:              5,994        1,481           147               559             256           8,437       7.77%
      20 to 24 years:              6,856          811           127               273             256           8,323       7.67%
      25 to 34 years:              9,215        2,165           256               884             583          13,103      12.07%




                                                                                                                                     56.55%
      35 to 44 years:              9,740        3,791           392             1,627             755          16,305      15.02%
      45 to 54 years:              8,545        3,376           225             1,440             578          14,164      13.05%
      55 to 59 years:              3,263        1,208            76               624             216           5,387       4.96%
      60 to 64 years:              2,536          825            59               520             174           4,114       3.79%
      65 to 74 years:              5,780        1,543           131               941             407           8,802       8.11%




                                                                                                                                     17.33%
      75 to 84 years:              5,305        1,088            85               572             406           7,456       6.87%
      85 years and over:           1,696          498            22               187             155           2,558       2.36%

      Total Population:           71,329       21,171         1,897             9,563            4,614        108,574      100.00%



INCOME (Per Household)

      Less than $10,000:           3,370          194            47               63              132           3,806       9.06%




                                                                                                                                     28.43% 50.27%
      $10,000 to $14,999:          2,379          279            41              123              212           3,034       7.23%
      $15,000 to $24,999:          3,886          699            87              235              190           5,097      12.14%
      $25,000 to $34,999:          4,086          809            90              300              264           5,549      13.22%
      $35,000 to $49,000:          4,624        1,108           138              602              505           6,977      16.62%
      $50,000 to $74,000:          5,295        1,756           213              915              404           8,583      20.44%
      $75,000 to $99,999:          2,385        1,235            53              605              111           4,389      10.45%




                                                                                                                                     21.30%
      $100,000 to $149,999:        1,439        1,123            24              540               87           3,213       7.65%
      $150,000 to $199,999:          371          209             7              126                7             720       1.71%
      $200,000 or more:              271          189             3              158                0             621       1.48%

      Total Households:           28,106        7,601           703             3,667            1,912         41,989      100.00%

      Median
      Household Income:           35,815       60,317        44,297            64,889           40,318         43,137




                                                                      5
                                      Demographic Information of the School District
                                                           (U.S. Census Bureau Data - 2000)


                                               Bethlehem       Bethlehem    Freemansburg   Hanover     Fountain Hill       TOTAL
                                                  City         Township       Borough      Township      Borough       SCHOOL DISTRICT   Percent
EMPLOYMENT

   Population 16 years and over:                  58,319           16,489         1,492        7,602           3,724         87,626      100.00%
     In labor force:                              34,338           10,567           965        4,682           2,111         52,663      60.10%
     Not in labor force:                          23,981            5,922           527        2,920           1,613         34,963      39.90%

   Occupation
     Management, professional
       & related occupations:                     10,420            3,915           174        2,498             733         17,740      36.01%
     Service occupations:                          5,442            1,368           163          401             354          7,728      15.69%
     Sales and office occupations:                 8,622            2,925           230        1,193             392         13,362      27.12%
     Farming, fishing, and forestry:                  21                4             0            0               0             25       0.05%
     Construction, extraction & maintenance:       2,128              707           123          157             193          3,308       6.71%
     Production, transportation
       & material moving occupations:              4,947            1,355           205         280              284          7,071      14.35%
     Armed Forces:                                    30                0             2           0                0             32       0.06%
                                                                                                                             49,266


PROPERTY USE

   Total households:                              28,116            7,619           687        3,633           1,911         41,966      100.00%
     Owner-occupied housing units:                16,327            6,611           506        3,084           1,275         27,803      66.25%
     Renter-occupied housing units:               11,789            1,008           181          549             636         14,163      33.75%
     Average household size:                        2.34             2.69          2.64         2.59            2.28           2.43




                                                                            6
ALLOCATION OF POTENTIAL GAMING REVENUE
                                Property Tax Reduction Index

                            BETHLEHEM AREA SCHOOL DISTRICT
                          Calculation of the Property Tax Reduction Index*:


    PI / ADM                     MV/PI AID RATIO                EQUALIZED MILLS                SCHOOL TAX RATIO
     (2006-07)                       (2006-07)                       (2004-05)                       (2004)
    (Rank) (1)                      (Rank) (2)                      (Rank) (3)                     (Rank) (4)


     $117,263                          0.4686                            21.6                           0.0505
  (137 out of 501)                 (138 out of 501)                (307 out of 501)                 (353 out of 501)



Property Tax Reduction Index              =       137 + 138 + 307 + 353           =     0.935
                                                          1,000                         (217 out of 501)
   ________________
   * Statistical components used to determine the PTRI are based upon the latest available information posted on the PA
      Department of Education website.

   (1)   PI / ADM (Personal Income / Average Daily Membership): Lowest income per student gets highest ranking (501).
   (2)   MV / PI Aid Ratio (Market Value / Personal Income): Highest aid ratio (least wealthy) gets highest ranking.
   (3)   Equalized Mills (Total School Taxes / Market Value): Highest tax effort gets highest ranking.
   (4)   School Tax Ratio (Total School Taxes / Personal Income): Highest tax effort gets highest ranking.




                                                         8
                           Allocation of Potential Gaming Revenue


Scenario 1 - Assumes Gaming Revenue for Property Tax Relief equals $400,000,000
             (Total Gaming Revenue would be $1,176,470,588)
SD Allocation      =          PTRI x ADM x                     Constant (Based on Revenue)             =     $3,129,608.03
                             (0.935) (15,526.05)                (215.58)



Scenario 2 - Assumes Gaming Revenue for Property Tax Relief equals $750,000,000
             (Total Gaming Revenue would be $2,205,882,353)
SD Allocation      =          PTRI x ADM x                     Constant (Based on Revenue)             =     $5,868,015.06
                             (0.935) (15,526.05)                (404.22)



Scenario 3 - Assumes Gaming Revenue for Property Tax Relief equals $1,000,000,000
             (Total Gaming Revenue would be $2,941,176,471)
SD Allocation      =          PTRI x ADM x                     Constant (Based on Revenue)             =     $7,824,020.07
                             (0.935) (15,526.05)                (404.22)

   ________________
   Note: The total allocation amount will be reduced by the total amount of Philadelphia Wage Tax credits. Average Daily
        Membership (ADM) figures are from 2004-05.



                                                              9
CALCULATION OF MAXIMUM / MINIMUM
          EIT INCREASE
     & HOMESTEAD EXCLUSION
Calculation of EIT Increase & Homestead Exclusion
   Eligible Homesteads / Farmsteads
              Total Eligible Homestead / Farmstead Properties (Estimated):            28,000
              Maximum Participation:                                                    100%
              Total Participation (Assuming Maximum):                                 28,000
              Estimated Minimum Participation:                                           75%
              Total Participation (Assuming Estimated Minimum):                       21,000

   Calculation of Minimum EIT Revenue Increase

              Current (FY2005) EIT Revenue:                                         9,980,379
              Minimum EIT Rate Increase:                                                1.00%
              Current EIT Rate (School District):                                       0.50%
              Current EIT Rate (Municipalities):                                        0.50%
              Current EIT Rate (Total):                                                 1.00%
              Minimum EIT Rate Increase as % of Current S.D. Rate:                    200.00%
              Minimum EIT Rate Increase as % of Current Total Rate:                   100.00%
              Year 1 Cashflow Adjustment:                                              60.00%
              Year 2 Cashflow Adjustment:                                              90.00%
              Year 3 (and after) Cashflow Adjustment:                                 100.00%
              Estimated Minimum Increase in EIT Collection in Year 1:              11,976,455
              Estimated Minimum Increase in EIT Collection in Year 2:              17,964,682
              Estimated Minimum Increase in EIT Collection in Year 3:              19,960,758

   Calculation of Maximum Exclusion
              Median Assessed Value:                                                49,525.00
              Maximum Exclusion:                                             50% of Median AV
              Maximum Allowable Assessed Value Exclusion:                              24,763
              Millage Rate:                                                             36.58
              Maximum Exclusion per Homestead:                                        905.81

   Calculation of Minimum Exclusion
              Minimum Exclusion is the Lesser of:
                   50% of the Maximum Exclusion:                                      452.91
                     and
                   Exclusion Resulting from a 1% EIT Increase
                          Year 1 - Maximum Participation                              427.73
                          Year 1 - Estimated Minimum Participation                    570.31




                                                      11
       Calculation of EIT Increase (Minimum) & Homestead Exclusion

DOLLARS AVAILABLE FOR PROPERTY TAX REDUCTION

  Commonwealth Gaming Distribution:               $0                 $400,000,000     $750,000,000     $1,000,000,000

  Assuming Minimum EIT Increase (1.00%):

  YEAR 1
     Gaming Revenue Allocation to SD:                    -                3,129,608        5,868,015         7,824,020
     Increase in EIT Collection in Year 1:        11,976,455             11,976,455       11,976,455        11,976,455
     Total Available for Year 1:                  11,976,455             15,106,063       17,844,470        19,800,475
     Tax Reduction per Property (Exclusion)
            At Maximum Participation:                  427.73                539.50           637.30            707.16
            At Estimated Minimum Participation:        570.31                719.34           849.74            942.88

  YEAR 2
     Gaming Revenue Allocation to SD:                    -                3,129,608        5,868,015         7,824,020
     Increase in EIT Collection in Year 2:        17,964,682             17,964,682       17,964,682        17,964,682
     Total Available for Year 2:                  17,964,682             21,094,290       23,832,697        25,788,702
     Tax Reduction per Property (Exclusion)
            At Maximum Participation:                  641.60                753.37           851.17            921.03
            At Estimated Minimum Participation:        855.46              1,004.49         1,134.89          1,228.03

  YEAR 3 AND AFTER
     Gaming Revenue Allocation to SD:                    -                3,129,608        5,868,015         7,824,020
     Increase in EIT Collection in Year 3:        19,960,758             19,960,758       19,960,758        19,960,758
     Total Available for Year 3 and After:        19,960,758             23,090,366       25,828,773        27,784,778
     Tax Reduction per Property (Exclusion)
            At Maximum Participation:                  712.88                824.66           922.46            992.31
            At Estimated Minimum Participation:        950.51              1,099.54         1,229.94          1,323.08




                                                                12
      Calculation of EIT Increase (Maximum) & Homestead Exclusion

DOLLARS AVAILABLE FOR PROPERTY TAX REDUCTION

  Commonwealth Gaming Distribution:              $0                 $400,000,000     $750,000,000     $1,000,000,000

  Assuming Maximum EIT Increase:
     Gaming Revenue Allocation to SD:                    -               3,129,608        5,868,015         7,824,020
     Amount Needed to Fund Max. Exclusion
          At Maximum Participation:              25,362,743             22,233,135       19,494,728        17,538,723
          At Estimated Minimum Participation:    19,022,057             15,892,449       13,154,042        11,198,037

     Add'l EIT Rate to Fund Maximum Exclusion
           At Maximum Participation:                  1.27%                  1.11%            0.98%             0.88%
           At Estimated Minimum Participation:        0.95%                  0.80%            0.66%             0.56%

     Tax Reduction per Property (Exclusion)

           YEAR 1
           At Maximum Participation:                  543.49                543.49           543.49            543.49
           At Estimated Minimum Participation:        724.65                724.65           724.65            724.65

           YEAR 2
           At Maximum Participation:                 815.23                 815.23           815.23            815.23
           At Estimated Minimum Participation:     1,086.97               1,086.97         1,086.97          1,086.97

           YEAR 3 AND AFTER
           At Maximum Participation:                 905.81                 905.81           905.81            905.81
           At Estimated Minimum Participation:     1,207.75               1,207.75         1,207.75          1,207.75




                                                               13
EARNED INCOME TAX (EIT)
           VS.
PERSONAL INCOME TAX (PIT)
                       Summary of Differences: EIT vs. PIT

•   EIT includes taxable compensation combined with net profits.

•   Taxable Compensation is income from:
    - Wages
    - Salaries
    - Tips
    - Any other payment for services rendered

•   Taxable compensation reduced by business expenses; therefore, differentiating
    this category from gross compensation.

•   Sole Proprietorship (Schedule C) net income

•   Partnership (K-1) ordinary income




                                                15
                        Summary of Differences: EIT vs. PIT

•   PIT includes eight (8) classes of income that are taxable:

     1.   Compensation
     2.   Interest
     3.   Dividends
     4.   Net profits from operation of a business, profession or farm
     5.   Net gains or income from disposition of tangible or intangible property
     6.   Net gains or income from rents, royalties, patents and copyrights
     7.   Net gains or income derived through estates or trusts
     8.   Gambling or lottery winnings




                                                16
                     Earned Income Tax (EIT) vs. Personal Income Tax (PIT)

                                                                                                                               Earned Income
                                                         EARNED               Dividend /     Miscellaneous     PERSONAL           as a % of      Out of State
Fiscal Year     Compensation +       Net Profit     =    INCOME          + Interest Income +    Income     =    INCOME         Personal Income   Income (1)


   2005                    n/a                n/a                  n/a                  n/a            n/a               n/a               n/a            n/a

   2004          1,728,612,246       154,754,352        1,883,366,598           81,029,937     146,896,910     2,111,293,445           89.20%      27,135,440

   2003          1,646,013,629       143,812,919        1,789,826,548           74,733,959      99,010,879     1,963,571,386           91.15%      20,818,893

   2002          1,608,383,679       138,529,005        1,746,912,684           84,001,156      80,918,890     1,911,832,730           91.37%      19,320,643

   2001                    n/a                n/a                  n/a                  n/a            n/a     1,936,109,733               n/a            n/a

   2000                    n/a                n/a                  n/a                  n/a            n/a     1,928,805,560               n/a            n/a

   1999                    n/a                n/a                  n/a                  n/a            n/a     1,869,650,688               n/a            n/a

   1998                    n/a                n/a                  n/a                  n/a            n/a     1,720,790,749               n/a            n/a

   1997                    n/a                n/a                  n/a                  n/a            n/a     1,684,003,505               n/a            n/a

   1996                    n/a                n/a                  n/a                  n/a            n/a     1,682,542,200               n/a            n/a

   1995                    n/a                n/a                  n/a                  n/a            n/a     1,584,960,845               n/a            n/a

                (1) Shown for reference only, amounts included in the Compensation column.

              Source: Pennsylvania Department of Education




                                                                                  17
           Earned Income Tax (EIT) vs. Personal Income Tax (PIT)

Estimated FY2008 Total Earned Income:           1,900,000,000
Assumed Earned Income/Personal Income Ratio:           91.00%
Estimated FY2008 Total Personal Income:         2,087,912,088



    Commonwealth Gaming Distribution:             $0            $400,000,000   $750,000,000   $1,000,000,000


Assuming MAXIMUM EIT Increase

    Additional EIT Rate
          At Maximum Participation:              1.27%             1.11%          0.98%           0.88%
          At Estimated Minimum Participation:    0.95%             0.80%          0.66%           0.56%

    Additional PIT Rate
          At Maximum Participation:              1.16%             1.01%          0.89%           0.80%
          At Estimated Minimum Participation:    0.87%             0.72%          0.60%           0.51%



Assuming MINIMUM EIT Increase

    Additional EIT Rate
          At Maximum Participation:              1.00%             1.00%          1.00%           1.00%
          At Estimated Minimum Participation:    1.00%             1.00%          1.00%           1.00%

    Additional PIT Rate
          At Maximum Participation:              0.91%             0.91%          0.91%           0.91%
          At Estimated Minimum Participation:    0.91%             0.91%          0.91%           0.91%




                                                         18
HYPOTHETICAL TAXPAYER ANALYSIS
                         Hypothetical Taxpayer Analysis
(No Commonwealth Gaming Distribution / Maximum Participation)
                YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
      @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

    Additional EIT:       1.00%           Additional EIT:       1.00%           Additional EIT:      1.00%
         Exclusion:      $427.73               Exclusion:      $641.60               Exclusion:     $712.88
  Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
      300,000            2,572.27           300,000            2,358.40           300,000           2,287.12
      200,000            1,572.27           200,000            1,358.40           200,000           1,287.12
      150,000            1,072.27           150,000             858.40            150,000            787.12
      125,000             822.27            125,000             608.40            125,000            537.12
      100,000             572.27            100,000             358.40            100,000            287.12
       90,000             472.27            90,000              258.40            90,000             187.12
       80,000             372.27            80,000              158.40            80,000              87.12
       70,000             272.27            70,000               58.40            70,000             (12.88)
       60,000             172.27            60,000              (41.60)           60,000            (112.88)
       50,000              72.27            50,000             (141.60)           50,000            (212.88)
       40,000             (27.73)           40,000             (241.60)           40,000            (312.88)
       30,000            (127.73)           30,000             (341.60)           30,000            (412.88)
       20,000            (227.73)           20,000             (441.60)           20,000            (512.88)
       10,000            (327.73)           10,000             (541.60)           10,000            (612.88)
         0               (427.73)              0               (641.60)              0              (712.88)


                YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
      @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

    Additional EIT:       1.27%           Additional EIT:       1.27%           Additional EIT:      1.27%
         Exclusion:      $543.49               Exclusion:      $815.23               Exclusion:     $905.81
  Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
      300,000            3,268.40           300,000            2,996.66           300,000           2,906.08
      200,000            1,997.77           200,000            1,726.03           200,000           1,635.45
      150,000            1,362.46           150,000            1,090.71           150,000           1,000.13
      125,000            1,044.80           125,000             773.06            125,000            682.48
      100,000             727.14            100,000             455.40            100,000            364.82
       90,000             600.08            90,000              328.34            90,000             237.75
       80,000             473.02            80,000              201.27            80,000             110.69
       70,000             345.95            70,000               74.21            70,000             (16.37)
       60,000             218.89            60,000              (52.85)           60,000            (143.43)
       50,000              91.83            50,000             (179.92)           50,000            (270.50)
       40,000             (35.24)           40,000             (306.98)           40,000            (397.56)
       30,000            (162.30)           30,000             (434.04)           30,000            (524.62)
       20,000            (289.36)           20,000             (561.10)           20,000            (651.69)
       10,000            (416.42)           10,000             (688.17)           10,000            (778.75)
         0               (543.49)              0               (815.23)              0              (905.81)




                                                      20
                             Hypothetical Taxpayer Analysis
(No Commonwealth Gaming Distribution / Estimated Minimum Participation)
                    YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
          @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

        Additional EIT:       1.00%           Additional EIT:       1.00%           Additional EIT:      1.00%
             Exclusion:      $570.31               Exclusion:      $855.46               Exclusion:     $950.51
      Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
          300,000            2,429.69           300,000            2,144.54           300,000           2,049.49
          200,000            1,429.69           200,000            1,144.54           200,000           1,049.49
          150,000             929.69            150,000             644.54            150,000            549.49
          125,000             679.69            125,000             394.54            125,000            299.49
          100,000             429.69            100,000             144.54            100,000             49.49
           90,000             329.69            90,000               44.54            90,000             (50.51)
           80,000             229.69            80,000              (55.46)           80,000            (150.51)
           70,000             129.69            70,000             (155.46)           70,000            (250.51)
           60,000              29.69            60,000             (255.46)           60,000            (350.51)
           50,000             (70.31)           50,000             (355.46)           50,000            (450.51)
           40,000            (170.31)           40,000             (455.46)           40,000            (550.51)
           30,000            (270.31)           30,000             (555.46)           30,000            (650.51)
           20,000            (370.31)           20,000             (655.46)           20,000            (750.51)
           10,000            (470.31)           10,000             (755.46)           10,000            (850.51)
             0               (570.31)              0               (855.46)              0              (950.51)


                    YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
          @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

        Additional EIT:       0.95%           Additional EIT:        0.95%          Additional EIT:      0.95%
             Exclusion:      $724.65               Exclusion:      $1,086.97             Exclusion:    $1,207.75
      Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
          300,000            2,134.27           300,000            1,771.94           300,000          1,651.17
          200,000            1,181.30           200,000             818.97            200,000           698.20
          150,000             704.81            150,000             342.48            150,000           221.71
          125,000             466.57            125,000             104.24            125,000            (16.53)
          100,000             228.32            100,000             (134.00)          100,000           (254.78)
           90,000             133.03            90,000              (229.30)          90,000            (350.07)
           80,000              37.73            80,000              (324.60)          80,000            (445.37)
           70,000             (57.57)           70,000              (419.89)          70,000            (540.67)
           60,000            (152.87)           60,000              (515.19)          60,000            (635.97)
           50,000            (248.16)           50,000              (610.49)          50,000            (731.26)
           40,000            (343.46)           40,000              (705.79)          40,000            (826.56)
           30,000            (438.76)           30,000              (801.08)          30,000            (921.86)
           20,000            (534.06)           20,000              (896.38)          20,000           (1,017.16)
           10,000            (629.35)           10,000              (991.68)          10,000           (1,112.45)
             0               (724.65)              0               (1,086.97)            0             (1,207.75)




                                                          21
                             Hypothetical Taxpayer Analysis
($400 Million Commonwealth Gaming Distribution / Maximum Participation)
                    YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
          @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

        Additional EIT:       1.00%           Additional EIT:       1.00%           Additional EIT:      1.00%
             Exclusion:      $539.50               Exclusion:      $753.37               Exclusion:     $824.66
      Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
          300,000            2,460.50           300,000            2,246.63           300,000           2,175.34
          200,000            1,460.50           200,000            1,246.63           200,000           1,175.34
          150,000             960.50            150,000             746.63            150,000            675.34
          125,000             710.50            125,000             496.63            125,000            425.34
          100,000             460.50            100,000             246.63            100,000            175.34
           90,000             360.50            90,000              146.63            90,000              75.34
           80,000             260.50            80,000               46.63            80,000             (24.66)
           70,000             160.50            70,000              (53.37)           70,000            (124.66)
           60,000              60.50            60,000             (153.37)           60,000            (224.66)
           50,000             (39.50)           50,000             (253.37)           50,000            (324.66)
           40,000            (139.50)           40,000             (353.37)           40,000            (424.66)
           30,000            (239.50)           30,000             (453.37)           30,000            (524.66)
           20,000            (339.50)           20,000             (553.37)           20,000            (624.66)
           10,000            (439.50)           10,000             (653.37)           10,000            (724.66)
             0               (539.50)              0               (753.37)              0              (824.66)


                    YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
          @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

        Additional EIT:       1.11%           Additional EIT:       1.11%           Additional EIT:      1.11%
             Exclusion:      $543.49               Exclusion:      $815.23               Exclusion:     $905.81
      Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
          300,000            2,798.04           300,000            2,526.30           300,000           2,435.71
          200,000            1,684.20           200,000            1,412.45           200,000           1,321.87
          150,000            1,127.28           150,000             855.53            150,000            764.95
          125,000             848.82            125,000             577.07            125,000            486.49
          100,000             570.35            100,000             298.61            100,000            208.03
           90,000             458.97            90,000              187.23            90,000              96.65
           80,000             347.59            80,000               75.84            80,000             (14.74)
           70,000             236.20            70,000              (35.54)           70,000            (126.12)
           60,000             124.82            60,000             (146.93)           60,000            (237.51)
           50,000              13.43            50,000             (258.31)           50,000            (348.89)
           40,000             (97.95)           40,000             (369.69)           40,000            (460.28)
           30,000            (209.33)           30,000             (481.08)           30,000            (571.66)
           20,000            (320.72)           20,000             (592.46)           20,000            (683.04)
           10,000            (432.10)           10,000             (703.85)           10,000            (794.43)
             0               (543.49)              0               (815.23)              0              (905.81)




                                                          22
                               Hypothetical Taxpayer Analysis
($400 Million Commonwealth Gaming Distribution / Est. Minimum Participation)
                      YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
            @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

          Additional EIT:       1.00%           Additional EIT:        1.00%          Additional EIT:      1.00%
               Exclusion:      $719.34               Exclusion:      $1,004.49             Exclusion:    $1,099.54
        Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
            300,000            2,280.66           300,000            1,995.51           300,000          1,900.46
            200,000            1,280.66           200,000             995.51            200,000           900.46
            150,000             780.66            150,000             495.51            150,000           400.46
            125,000             530.66            125,000             245.51            125,000           150.46
            100,000             280.66            100,000              (4.49)           100,000            (99.54)
             90,000             180.66            90,000              (104.49)          90,000            (199.54)
             80,000              80.66            80,000              (204.49)          80,000            (299.54)
             70,000             (19.34)           70,000              (304.49)          70,000            (399.54)
             60,000            (119.34)           60,000              (404.49)          60,000            (499.54)
             50,000            (219.34)           50,000              (504.49)          50,000            (599.54)
             40,000            (319.34)           40,000              (604.49)          40,000            (699.54)
             30,000            (419.34)           30,000              (704.49)          30,000            (799.54)
             20,000            (519.34)           20,000              (804.49)          20,000            (899.54)
             10,000            (619.34)           10,000              (904.49)          10,000            (999.54)
               0               (719.34)              0               (1,004.49)            0             (1,099.54)


                      YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
            @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

          Additional EIT:       0.80%           Additional EIT:        0.80%          Additional EIT:      0.80%
               Exclusion:      $724.65               Exclusion:      $1,086.97             Exclusion:    $1,207.75
        Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
            300,000            1,663.90           300,000            1,301.58           300,000          1,180.80
            200,000             867.72            200,000             505.39            200,000           384.62
            150,000             469.63            150,000             107.30            150,000            (13.47)
            125,000             270.58            125,000              (91.74)          125,000           (212.52)
            100,000              71.53            100,000             (290.79)          100,000           (411.57)
             90,000              (8.08)           90,000              (370.41)          90,000            (491.18)
             80,000             (87.70)           80,000              (450.03)          80,000            (570.80)
             70,000            (167.32)           70,000              (529.65)          70,000            (650.42)
             60,000            (246.94)           60,000              (609.26)          60,000            (730.04)
             50,000            (326.56)           50,000              (688.88)          50,000            (809.66)
             40,000            (406.18)           40,000              (768.50)          40,000            (889.28)
             30,000            (485.79)           30,000              (848.12)          30,000            (968.89)
             20,000            (565.41)           20,000              (927.74)          20,000           (1,048.51)
             10,000            (645.03)           10,000             (1,007.36)         10,000           (1,128.13)
               0               (724.65)              0               (1,086.97)            0             (1,207.75)




                                                            23
                             Hypothetical Taxpayer Analysis
($750 Million Commonwealth Gaming Distribution / Maximum Participation)
                    YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
          @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

        Additional EIT:       1.00%           Additional EIT:       1.00%           Additional EIT:      1.00%
             Exclusion:      $637.30               Exclusion:      $851.17               Exclusion:     $922.46
      Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
          300,000            2,362.70           300,000            2,148.83           300,000           2,077.54
          200,000            1,362.70           200,000            1,148.83           200,000           1,077.54
          150,000             862.70            150,000             648.83            150,000            577.54
          125,000             612.70            125,000             398.83            125,000            327.54
          100,000             362.70            100,000             148.83            100,000             77.54
           90,000             262.70            90,000               48.83            90,000             (22.46)
           80,000             162.70            80,000              (51.17)           80,000            (122.46)
           70,000              62.70            70,000             (151.17)           70,000            (222.46)
           60,000             (37.30)           60,000             (251.17)           60,000            (322.46)
           50,000            (137.30)           50,000             (351.17)           50,000            (422.46)
           40,000            (237.30)           40,000             (451.17)           40,000            (522.46)
           30,000            (337.30)           30,000             (551.17)           30,000            (622.46)
           20,000            (437.30)           20,000             (651.17)           20,000            (722.46)
           10,000            (537.30)           10,000             (751.17)           10,000            (822.46)
             0               (637.30)              0               (851.17)              0              (922.46)


                    YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
          @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

        Additional EIT:       0.98%           Additional EIT:       0.98%           Additional EIT:      0.98%
             Exclusion:      $543.49               Exclusion:      $815.23               Exclusion:     $905.81
      Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
          300,000            2,386.47           300,000            2,114.73           300,000           2,024.15
          200,000            1,409.82           200,000            1,138.07           200,000           1,047.49
          150,000             921.49            150,000             649.75            150,000            559.17
          125,000             677.33            125,000             405.58            125,000            315.00
          100,000             433.17            100,000             161.42            100,000             70.84
           90,000             335.50            90,000               63.76            90,000             (26.82)
           80,000             237.83            80,000              (33.91)           80,000            (124.49)
           70,000             140.17            70,000             (131.57)           70,000            (222.16)
           60,000              42.50            60,000             (229.24)           60,000            (319.82)
           50,000             (55.16)           50,000             (326.90)           50,000            (417.49)
           40,000            (152.83)           40,000             (424.57)           40,000            (515.15)
           30,000            (250.49)           30,000             (522.24)           30,000            (612.82)
           20,000            (348.16)           20,000             (619.90)           20,000            (710.48)
           10,000            (445.82)           10,000             (717.57)           10,000            (808.15)
             0               (543.49)              0               (815.23)              0              (905.81)




                                                          24
                               Hypothetical Taxpayer Analysis
($750 Million Commonwealth Gaming Distribution / Est. Minimum Participation)
                      YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
            @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

          Additional EIT:       1.00%           Additional EIT:        1.00%          Additional EIT:      1.00%
               Exclusion:      $849.74               Exclusion:      $1,134.89             Exclusion:    $1,229.94
        Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
            300,000            2,150.26           300,000            1,865.11           300,000          1,770.06
            200,000            1,150.26           200,000             865.11            200,000           770.06
            150,000             650.26            150,000             365.11            150,000           270.06
            125,000             400.26            125,000             115.11            125,000            20.06
            100,000             150.26            100,000             (134.89)          100,000           (229.94)
             90,000              50.26            90,000              (234.89)          90,000            (329.94)
             80,000             (49.74)           80,000              (334.89)          80,000            (429.94)
             70,000            (149.74)           70,000              (434.89)          70,000            (529.94)
             60,000            (249.74)           60,000              (534.89)          60,000            (629.94)
             50,000            (349.74)           50,000              (634.89)          50,000            (729.94)
             40,000            (449.74)           40,000              (734.89)          40,000            (829.94)
             30,000            (549.74)           30,000              (834.89)          30,000            (929.94)
             20,000            (649.74)           20,000              (934.89)          20,000           (1,029.94)
             10,000            (749.74)           10,000             (1,034.89)         10,000           (1,129.94)
               0               (849.74)              0               (1,134.89)            0             (1,229.94)


                      YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
            @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

          Additional EIT:       0.66%           Additional EIT:        0.66%          Additional EIT:      0.66%
               Exclusion:      $724.65               Exclusion:      $1,086.97             Exclusion:    $1,207.75
        Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
            300,000            1,252.34           300,000             890.01            300,000           769.24
            200,000             593.34            200,000             231.02            200,000           110.24
            150,000             263.84            150,000              (98.48)          150,000           (219.26)
            125,000              99.09            125,000             (263.23)          125,000           (384.01)
            100,000             (65.65)           100,000             (427.98)          100,000           (548.75)
             90,000            (131.55)           90,000              (493.88)          90,000            (614.65)
             80,000            (197.45)           80,000              (559.78)          80,000            (680.55)
             70,000            (263.35)           70,000              (625.68)          70,000            (746.45)
             60,000            (329.25)           60,000              (691.58)          60,000            (812.35)
             50,000            (395.15)           50,000              (757.48)          50,000            (878.25)
             40,000            (461.05)           40,000              (823.38)          40,000            (944.15)
             30,000            (526.95)           30,000              (889.28)          30,000           (1,010.05)
             20,000            (592.85)           20,000              (955.18)          20,000           (1,075.95)
             10,000            (658.75)           10,000             (1,021.08)         10,000           (1,141.85)
               0               (724.65)              0               (1,086.97)            0             (1,207.75)




                                                            25
                            Hypothetical Taxpayer Analysis
($1 Billion Commonwealth Gaming Distribution / Maximum Participation)
                   YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
         @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

       Additional EIT:       1.00%           Additional EIT:       1.00%           Additional EIT:      1.00%
            Exclusion:      $707.16               Exclusion:      $921.03               Exclusion:     $992.31
     Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
         300,000            2,292.84           300,000            2,078.97           300,000           2,007.69
         200,000            1,292.84           200,000            1,078.97           200,000           1,007.69
         150,000             792.84            150,000             578.97            150,000            507.69
         125,000             542.84            125,000             328.97            125,000            257.69
         100,000             292.84            100,000              78.97            100,000             7.69
          90,000             192.84            90,000              (21.03)           90,000             (92.31)
          80,000              92.84            80,000             (121.03)           80,000            (192.31)
          70,000              (7.16)           70,000             (221.03)           70,000            (292.31)
          60,000            (107.16)           60,000             (321.03)           60,000            (392.31)
          50,000            (207.16)           50,000             (421.03)           50,000            (492.31)
          40,000            (307.16)           40,000             (521.03)           40,000            (592.31)
          30,000            (407.16)           30,000             (621.03)           30,000            (692.31)
          20,000            (507.16)           20,000             (721.03)           20,000            (792.31)
          10,000            (607.16)           10,000             (821.03)           10,000            (892.31)
            0               (707.16)              0               (921.03)              0              (992.31)


                   YEAR 1                                YEAR 2                        YEAR 3 AND AFTER
         @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

       Additional EIT:       0.88%           Additional EIT:       0.88%           Additional EIT:      0.88%
            Exclusion:      $543.49               Exclusion:      $815.23               Exclusion:     $905.81
     Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
         300,000            2,092.49           300,000            1,820.75           300,000           1,730.17
         200,000            1,213.83           200,000             942.09            200,000            851.51
         150,000             774.50            150,000             502.76            150,000            412.18
         125,000             554.84            125,000             283.09            125,000            192.51
         100,000             335.17            100,000              63.43            100,000            (27.15)
          90,000             247.31            90,000              (24.44)           90,000            (115.02)
          80,000             159.44            80,000             (112.30)           80,000            (202.88)
          70,000              71.57            70,000             (200.17)           70,000            (290.75)
          60,000             (16.29)           60,000             (288.03)           60,000            (378.62)
          50,000            (104.16)           50,000             (375.90)           50,000            (466.48)
          40,000            (192.02)           40,000             (463.77)           40,000            (554.35)
          30,000            (279.89)           30,000             (551.63)           30,000            (642.21)
          20,000            (367.76)           20,000             (639.50)           20,000            (730.08)
          10,000            (455.62)           10,000             (727.37)           10,000            (817.95)
            0               (543.49)              0               (815.23)              0              (905.81)




                                                         26
                            Hypothetical Taxpayer Analysis
($1 Billion Commonwealth Gaming Distribution / Est. Minimum Participation)
                      YEAR 1                                 YEAR 2                       YEAR 3 AND AFTER
            @ Minimum EIT Increase                @ Minimum EIT Increase                @ Minimum EIT Increase

          Additional EIT:       1.00%           Additional EIT:         1.00%         Additional EIT:      1.00%
               Exclusion:      $942.88               Exclusion:       $1,228.03            Exclusion:    $1,323.08
        Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
            300,000            2,057.12           300,000             1,771.97          300,000          1,676.92
            200,000            1,057.12           200,000              771.97           200,000           676.92
            150,000             557.12            150,000              271.97           150,000           176.92
            125,000             307.12            125,000               21.97           125,000            (73.08)
            100,000              57.12            100,000              (228.03)         100,000           (323.08)
             90,000             (42.88)           90,000               (328.03)         90,000            (423.08)
             80,000            (142.88)           80,000               (428.03)         80,000            (523.08)
             70,000            (242.88)           70,000               (528.03)         70,000            (623.08)
             60,000            (342.88)           60,000               (628.03)         60,000            (723.08)
             50,000            (442.88)           50,000               (728.03)         50,000            (823.08)
             40,000            (542.88)           40,000               (828.03)         40,000            (923.08)
             30,000            (642.88)           30,000               (928.03)         30,000           (1,023.08)
             20,000            (742.88)           20,000              (1,028.03)        20,000           (1,123.08)
             10,000            (842.88)           10,000              (1,128.03)        10,000           (1,223.08)
               0               (942.88)              0                (1,228.03)           0             (1,323.08)


                      YEAR 1                                 YEAR 2                       YEAR 3 AND AFTER
            @ Maximum EIT Increase                @ Maximum EIT Increase                @ Maximum EIT Increase

          Additional EIT:       0.56%           Additional EIT:         0.56%         Additional EIT:      0.56%
               Exclusion:      $724.65               Exclusion:       $1,086.97            Exclusion:    $1,207.75
        Household Income Net Tax Adjustment   Household Income Net Tax Adjustment   Household Income Net Tax Adjustment
            300,000             958.36            300,000              596.03           300,000           475.26
            200,000             397.36            200,000               35.03           200,000            (85.74)
            150,000             116.85            150,000              (245.47)         150,000           (366.25)
            125,000             (23.40)           125,000              (385.72)         125,000           (506.50)
            100,000            (163.65)           100,000              (525.97)         100,000           (646.75)
             90,000            (219.75)           90,000               (582.07)         90,000            (702.85)
             80,000            (275.85)           80,000               (638.17)         80,000            (758.95)
             70,000            (331.95)           70,000               (694.27)         70,000            (815.05)
             60,000            (388.05)           60,000               (750.37)         60,000            (871.15)
             50,000            (444.15)           50,000               (806.47)         50,000            (927.25)
             40,000            (500.25)           40,000               (862.57)         40,000            (983.35)
             30,000            (556.35)           30,000               (918.67)         30,000           (1,039.45)
             20,000            (612.45)           20,000               (974.77)         20,000           (1,095.55)
             10,000            (668.55)           10,000              (1,030.87)        10,000           (1,151.65)
               0               (724.65)              0                (1,086.97)           0             (1,207.75)




                                                            27
                                                          Taxpayer Profile #1 - Family Owning Home
                 (Total Wage Income = $45,000 / Investment Income = $5,000 / Value of Home = $49,525)
                                                                                            NET TAX IMPACT OF HOUSEHOLD
                                                                                     YEAR 1                                         YEAR 2                                   YEAR 3 & AFTER
                                                      Gaming        EIT Tax    Homestead   NET TAX       %         EIT Tax    Homestead   NET TAX       %        EIT Tax    Homestead   NET TAX       %
                                                    Distribution    Increase   Exclusion   IMPACT      CHANGE      Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE
                                                               $0     1.00%        $570       ($120)     -5.91%      1.00%         $855      ($405)    -19.91%     1.00%         $951      ($501)    -24.58%
                                     Estimated
                                                    $400 Million      1.00%        $719       ($269)    -13.22%      1.00%       $1,004      ($554)    -27.23%     1.00%       $1,100      ($650)    -31.89%
                      Minimum EIT




                                     Minimum
                                                    $750 Million      1.00%        $850       ($400)    -19.63%      1.00%       $1,135      ($685)    -33.63%     1.00%       $1,230      ($780)    -38.30%
                        Increase




                                    Participation
                                                       $1 Billion     1.00%        $943       ($493)    -24.20%      1.00%       $1,228      ($778)    -38.20%     1.00%       $1,323      ($873)    -42.87%
EARNED INCOME TAX




                                                               $0     1.00%        $428         $22       1.09%      1.00%        $642       ($192)     -9.41%     1.00%        $713       ($263)    -12.91%
                                     Maximum        $400 Million      1.00%        $540        ($90)     -4.39%      1.00%        $753       ($303)    -14.90%     1.00%        $825       ($375)    -18.40%
                                    Participation   $750 Million      1.00%        $637       ($187)     -9.20%      1.00%        $851       ($401)    -19.70%     1.00%        $922       ($472)    -23.20%
                                                       $1 Billion     1.00%        $707       ($257)    -12.63%      1.00%        $921       ($471)    -23.13%     1.00%        $992       ($542)    -26.63%

                                                               $0     0.95%        $725       ($296)    -14.52%      0.95%       $1,087      ($658)    -32.32%     0.95%       $1,208      ($779)    -38.25%
                                     Estimated
                                                    $400 Million      0.80%        $725       ($366)    -17.99%      0.80%       $1,087      ($729)    -35.78%     0.80%       $1,208      ($849)    -41.71%
                      Maximum EIT




                                     Minimum
                                                    $750 Million      0.66%        $725       ($428)    -21.02%      0.66%       $1,087      ($790)    -38.81%     0.66%       $1,208      ($911)    -44.74%
                        Increase




                                    Participation
                                                       $1 Billion     0.56%        $725       ($472)    -23.19%      0.56%       $1,087      ($835)    -40.98%     0.56%       $1,208      ($955)    -46.91%
                                                               $0     1.27%        $543         $28      1.39%       1.27%        $815       ($243)    -11.95%     1.27%        $906       ($334)    -16.40%
                                     Maximum        $400 Million      1.11%        $543        ($42)    -2.07%       1.11%        $815       ($314)    -15.42%     1.11%        $906       ($405)    -19.87%
                                    Participation   $750 Million      0.98%        $543       ($104)    -5.11%       0.98%        $815       ($376)    -18.45%     0.98%        $906       ($466)    -22.90%
                                                       $1 Billion     0.88%        $543       ($148)    -7.27%       0.88%        $815       ($420)    -20.61%     0.88%        $906       ($510)    -25.06%

                                                                    PIT Tax    Homestead   NET TAX       %         PIT Tax    Homestead   NET TAX       %        PIT Tax    Homestead   NET TAX       %
                                                                    Increase   Exclusion   IMPACT      CHANGE      Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE
                                                               $0     0.91%        $570       ($115)     -5.66%      0.91%         $855      ($400)    -19.66%     0.91%         $951      ($496)    -24.33%
                                     Estimated
                                                    $400 Million      0.91%        $719       ($264)    -12.98%      0.91%       $1,004      ($549)    -26.98%     0.91%       $1,100      ($645)    -31.65%
                      Minimum PIT




                                     Minimum
                                                    $750 Million      0.91%        $850       ($395)    -19.38%      0.91%       $1,135      ($680)    -33.38%     0.91%       $1,230      ($775)    -38.05%
                        Increase




                                    Participation
PERSONAL INCOME TAX




                                                       $1 Billion     0.91%        $943       ($488)    -23.96%      0.91%       $1,228      ($773)    -37.96%     0.91%       $1,323      ($868)    -42.62%
                                                               $0     0.91%        $428         $27       1.34%      0.91%        $642       ($187)     -9.16%     0.91%        $713       ($258)    -12.66%
                                     Maximum        $400 Million      0.91%        $540        ($85)     -4.15%      0.91%        $753       ($298)    -14.65%     0.91%        $825       ($370)    -18.15%
                                    Participation   $750 Million      0.91%        $637       ($182)     -8.95%      0.91%        $851       ($396)    -19.45%     0.91%        $922       ($467)    -22.95%
                                                       $1 Billion     0.91%        $707       ($252)    -12.38%      0.91%        $921       ($466)    -22.88%     0.91%        $992       ($537)    -26.38%

                                                               $0     0.87%        $725       ($291)    -14.29%      0.87%       $1,087      ($653)    -32.08%     0.87%       $1,208      ($774)    -38.01%
                                     Estimated
                                                    $400 Million      0.72%        $725       ($362)    -17.79%      0.72%       $1,087      ($725)    -35.58%     0.72%       $1,208      ($845)    -41.51%
                      Maximum PIT




                                     Minimum
                                                    $750 Million      0.60%        $725       ($425)    -20.86%      0.60%       $1,087      ($787)    -38.65%     0.60%       $1,208      ($908)    -44.58%
                        Increase




                                    Participation
                                                       $1 Billion     0.51%        $725       ($469)    -23.05%      0.51%       $1,087      ($832)    -40.84%     0.51%       $1,208      ($952)    -46.77%
                                                               $0     1.16%        $543         $35      1.70%       1.16%        $815       ($237)    -11.64%     1.16%        $906       ($328)    -16.09%
                                     Maximum        $400 Million      1.01%        $543        ($37)    -1.80%       1.01%        $815       ($308)    -15.14%     1.01%        $906       ($399)    -19.59%
                                    Participation   $750 Million      0.89%        $543        ($99)    -4.87%       0.89%        $815       ($371)    -18.21%     0.89%        $906       ($461)    -22.66%
                                                       $1 Billion     0.80%        $543       ($144)    -7.06%       0.80%        $815       ($415)    -20.40%     0.80%        $906       ($506)    -24.85%




                                                                                                              28
                                                          Taxpayer Profile #2 - Family Owning Home
(Total Wage Income = $90,000 / Investment Income = $10,000 / Value of Home = $100,000)
                                                                                            NET TAX IMPACT OF HOUSEHOLD
                                                                                     YEAR 1                                        YEAR 2                                   YEAR 3 & AFTER
                                                      Gaming        EIT Tax    Homestead   NET TAX       %        EIT Tax    Homestead   NET TAX       %        EIT Tax    Homestead   NET TAX       %
                                                    Distribution    Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE
                                                               $0     1.00%        $570       $330       8.03%      1.00%         $855        $45      1.08%      1.00%         $951       ($51)     -1.23%
                                     Estimated
                                                    $400 Million      1.00%        $719       $181       4.40%      1.00%       $1,004      ($104)    -2.54%      1.00%       $1,100      ($200)     -4.86%
                      Minimum EIT




                                     Minimum
                                                    $750 Million      1.00%        $850        $50       1.22%      1.00%       $1,135      ($235)    -5.72%      1.00%       $1,230      ($330)     -8.03%
                        Increase




                                    Participation
                                                       $1 Billion     1.00%        $943       ($43)     -1.04%      1.00%       $1,228      ($328)    -7.99%      1.00%       $1,323      ($423)    -10.30%
EARNED INCOME TAX




                                                               $0     1.00%        $428       $472      11.50%      1.00%        $642       $258       6.29%      1.00%        $713       $187       4.55%
                                     Maximum        $400 Million      1.00%        $540       $360       8.78%      1.00%        $753       $147       3.57%      1.00%        $825        $75       1.83%
                                    Participation   $750 Million      1.00%        $637       $263       6.39%      1.00%        $851        $49       1.19%      1.00%        $922       ($22)     -0.55%
                                                       $1 Billion     1.00%        $707       $193       4.69%      1.00%        $921       ($21)     -0.51%      1.00%        $992       ($92)     -2.25%

                                                               $0     0.95%        $725        $133      3.24%      0.95%       $1,087      ($229)     -5.58%     0.95%       $1,208      ($350)     -8.52%
                                     Estimated
                                                    $400 Million      0.80%        $725         ($8)    -0.20%      0.80%       $1,087      ($370)     -9.02%     0.80%       $1,208      ($491)    -11.96%
                      Maximum EIT




                                     Minimum
                                                    $750 Million      0.66%        $725       ($132)    -3.20%      0.66%       $1,087      ($494)    -12.02%     0.66%       $1,208      ($615)    -14.96%
                        Increase




                                    Participation
                                                       $1 Billion     0.56%        $725       ($220)    -5.35%      0.56%       $1,087      ($582)    -14.17%     0.56%       $1,208      ($703)    -17.11%
                                                               $0     1.27%        $543       $600      14.61%      1.27%        $815       $328       7.99%      1.27%        $906        $238      5.79%
                                     Maximum        $400 Million      1.11%        $543       $459      11.17%      1.11%        $815       $187       4.56%      1.11%        $906         $97      2.35%
                                    Participation   $750 Million      0.98%        $543       $336       8.17%      0.98%        $815        $64       1.55%      0.98%        $906        ($27)    -0.65%
                                                       $1 Billion     0.88%        $543       $247       6.02%      0.88%        $815       ($24)     -0.59%      0.88%        $906       ($115)    -2.80%

                                                                    PIT Tax    Homestead   NET TAX       %        PIT Tax    Homestead   NET TAX       %        PIT Tax    Homestead   NET TAX       %
                                                                    Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE
                                                               $0     0.91%        $570       $340       8.27%      0.91%         $855        $55      1.33%      0.91%         $951       ($41)     -0.99%
                                     Estimated
                                                    $400 Million      0.91%        $719       $191       4.64%      0.91%       $1,004       ($94)    -2.30%      0.91%       $1,100      ($190)     -4.61%
                      Minimum PIT




                                     Minimum
                                                    $750 Million      0.91%        $850        $60       1.47%      0.91%       $1,135      ($225)    -5.47%      0.91%       $1,230      ($320)     -7.79%
                        Increase




                                    Participation
PERSONAL INCOME TAX




                                                       $1 Billion     0.91%        $943       ($33)     -0.80%      0.91%       $1,228      ($318)    -7.74%      0.91%       $1,323      ($413)    -10.06%
                                                               $0     0.91%        $428       $482      11.74%      0.91%        $642       $268       6.53%      0.91%        $713       $197       4.80%
                                     Maximum        $400 Million      0.91%        $540       $370       9.02%      0.91%        $753       $157       3.81%      0.91%        $825        $85       2.08%
                                    Participation   $750 Million      0.91%        $637       $273       6.64%      0.91%        $851        $59       1.43%      0.91%        $922       ($12)     -0.30%
                                                       $1 Billion     0.91%        $707       $203       4.94%      0.91%        $921       ($11)     -0.27%      0.91%        $992       ($82)     -2.00%

                                                               $0     0.87%        $725        $143      3.47%      0.87%       $1,087      ($220)     -5.35%     0.87%       $1,208      ($341)     -8.29%
                                     Estimated
                                                    $400 Million      0.72%        $725         ($0)     0.00%      0.72%       $1,087      ($362)     -8.82%     0.72%       $1,208      ($483)    -11.76%
                      Maximum PIT




                                     Minimum
                                                    $750 Million      0.60%        $725       ($125)    -3.04%      0.60%       $1,087      ($487)    -11.86%     0.60%       $1,208      ($608)    -14.80%
                        Increase




                                    Participation
                                                       $1 Billion     0.51%        $725       ($214)    -5.21%      0.51%       $1,087      ($576)    -14.03%     0.51%       $1,208      ($697)    -16.97%
                                                               $0     1.16%        $543       $613      14.92%      1.16%        $815       $341       8.30%      1.16%        $906        $250      6.10%
                                     Maximum        $400 Million      1.01%        $543       $470      11.44%      1.01%        $815       $198       4.83%      1.01%        $906        $108      2.62%
                                    Participation   $750 Million      0.89%        $543       $345       8.40%      0.89%        $815        $74       1.79%      0.89%        $906        ($17)    -0.42%
                                                       $1 Billion     0.80%        $543       $256       6.23%      0.80%        $815       ($16)     -0.38%      0.80%        $906       ($106)    -2.59%




                                                                                                             29
                                                           Taxpayer Profile #3 - Family Renting Home
                        (Total Wage Income = $45,000 / Investment Income = $5,000 / Value of Home = $0)
                                                                                            NET TAX IMPACT OF HOUSEHOLD
                                                                                     YEAR 1                                      YEAR 2                                YEAR 3 & AFTER
                                                      Gaming        EIT Tax    Homestead   NET TAX     %        EIT Tax    Homestead   NET TAX     %       EIT Tax    Homestead   NET TAX     %
                                                    Distribution    Increase   Exclusion   IMPACT    CHANGE     Increase   Exclusion   IMPACT    CHANGE    Increase   Exclusion   IMPACT    CHANGE
                                                               $0     1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%
                                     Estimated
                                                    $400 Million      1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%
                      Minimum EIT




                                     Minimum
                                                    $750 Million      1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%
                        Increase




                                    Participation
                                                       $1 Billion     1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%
EARNED INCOME TAX




                                                               $0     1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%
                                     Maximum        $400 Million      1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%
                                    Participation   $750 Million      1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%
                                                       $1 Billion     1.00%          $0       $450   200.00%      1.00%          $0       $450   200.00%     1.00%          $0       $450   200.00%

                                                               $0     0.95%          $0       $429   190.59%      0.95%          $0       $429   190.59%     0.95%          $0       $429   190.59%
                                     Estimated
                                                    $400 Million      0.80%          $0       $358   159.24%      0.80%          $0       $358   159.24%     0.80%          $0       $358   159.24%
                      Maximum EIT




                                     Minimum
                                                    $750 Million      0.66%          $0       $297   131.80%      0.66%          $0       $297   131.80%     0.66%          $0       $297   131.80%
                        Increase




                                    Participation
                                                       $1 Billion     0.56%          $0       $252   112.20%      0.56%          $0       $252   112.20%     0.56%          $0       $252   112.20%
                                                               $0     1.27%          $0       $572   254.13%      1.27%          $0       $572   254.13%     1.27%          $0       $572   254.13%
                                     Maximum        $400 Million      1.11%          $0       $501   222.77%      1.11%          $0       $501   222.77%     1.11%          $0       $501   222.77%
                                    Participation   $750 Million      0.98%          $0       $439   195.33%      0.98%          $0       $439   195.33%     0.98%          $0       $439   195.33%
                                                       $1 Billion     0.88%          $0       $395   175.73%      0.88%          $0       $395   175.73%     0.88%          $0       $395   175.73%

                                                                    PIT Tax    Homestead   NET TAX     %        PIT Tax    Homestead   NET TAX     %       PIT Tax    Homestead   NET TAX     %
                                                                    Increase   Exclusion   IMPACT    CHANGE     Increase   Exclusion   IMPACT    CHANGE    Increase   Exclusion   IMPACT    CHANGE
                                                               $0     0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%
                                     Estimated
                                                    $400 Million      0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%
                      Minimum PIT




                                     Minimum
                                                    $750 Million      0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%
                        Increase




                                    Participation
PERSONAL INCOME TAX




                                                       $1 Billion     0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%
                                                               $0     0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%
                                     Maximum        $400 Million      0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%
                                    Participation   $750 Million      0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%
                                                       $1 Billion     0.91%          $0       $455   202.22%      0.91%          $0       $455   202.22%     0.91%          $0       $455   202.22%

                                                               $0     0.87%          $0       $434   192.71%      0.87%          $0       $434   192.71%     0.87%          $0       $434   192.71%
                                     Estimated
                                                    $400 Million      0.72%          $0       $362   161.01%      0.72%          $0       $362   161.01%     0.72%          $0       $362   161.01%
                      Maximum PIT




                                     Minimum
                                                    $750 Million      0.60%          $0       $300   133.26%      0.60%          $0       $300   133.26%     0.60%          $0       $300   133.26%
                        Increase




                                    Participation
                                                       $1 Billion     0.51%          $0       $255   113.45%      0.51%          $0       $255   113.45%     0.51%          $0       $255   113.45%
                                                               $0     1.16%          $0       $578   256.95%      1.16%          $0       $578   256.95%     1.16%          $0       $578   256.95%
                                     Maximum        $400 Million      1.01%          $0       $507   225.24%      1.01%          $0       $507   225.24%     1.01%          $0       $507   225.24%
                                    Participation   $750 Million      0.89%          $0       $444   197.50%      0.89%          $0       $444   197.50%     0.89%          $0       $444   197.50%
                                                       $1 Billion     0.80%          $0       $400   177.68%      0.80%          $0       $400   177.68%     0.80%          $0       $400   177.68%




                                                                                                           30
                                                    Taxpayer Profile #4 - Single Retiree Owning Home
                      (Total Wage Income = $0 / Investment Income = $10,000 / Value of Home = $49,525)
                                                                                             NET TAX IMPACT OF HOUSEHOLD
                                                                                      YEAR 1                                         YEAR 2                                   YEAR 3 & AFTER
                                                      Gaming         EIT Tax    Homestead   NET TAX       %         EIT Tax    Homestead   NET TAX       %        EIT Tax    Homestead   NET TAX       %
                                                    Distribution     Increase   Exclusion   IMPACT      CHANGE      Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE
                                                                $0     1.00%        $570       ($570)    -31.48%      1.00%         $855      ($855)    -47.22%     1.00%         $951      ($951)    -52.47%
                                     Estimated
                                                     $400 Million      1.00%        $719       ($719)    -39.71%      1.00%       $1,004    ($1,004)    -55.45%     1.00%       $1,100    ($1,100)    -60.69%
                      Minimum EIT




                                     Minimum
                                                     $750 Million      1.00%        $850       ($850)    -46.90%      1.00%       $1,135    ($1,135)    -62.64%     1.00%       $1,230    ($1,230)    -67.89%
                        Increase




                                    Participation
                                                        $1 Billion     1.00%        $943       ($943)    -52.05%      1.00%       $1,228    ($1,228)    -67.79%     1.00%       $1,323    ($1,323)    -73.03%
EARNED INCOME TAX




                                                                $0     1.00%        $428       ($428)    -23.61%      1.00%        $642       ($642)    -35.42%     1.00%        $713       ($713)    -39.35%
                                     Maximum         $400 Million      1.00%        $540       ($540)    -29.78%      1.00%        $753       ($753)    -41.59%     1.00%        $825       ($825)    -45.52%
                                    Participation    $750 Million      1.00%        $637       ($637)    -35.18%      1.00%        $851       ($851)    -46.98%     1.00%        $922       ($922)    -50.92%
                                                        $1 Billion     1.00%        $707       ($707)    -39.03%      1.00%        $921       ($921)    -50.84%     1.00%        $992       ($992)    -54.77%

                                                                $0     0.95%        $725       ($725)    -40.00%      0.95%       $1,087    ($1,087)    -60.00%     0.95%       $1,208    ($1,208)    -66.67%
                                     Estimated
                                                     $400 Million      0.80%        $725       ($725)    -40.00%      0.80%       $1,087    ($1,087)    -60.00%     0.80%       $1,208    ($1,208)    -66.67%
                      Maximum EIT




                                     Minimum
                                                     $750 Million      0.66%        $725       ($725)    -40.00%      0.66%       $1,087    ($1,087)    -60.00%     0.66%       $1,208    ($1,208)    -66.67%
                        Increase




                                    Participation
                                                        $1 Billion     0.56%        $725       ($725)    -40.00%      0.56%       $1,087    ($1,087)    -60.00%     0.56%       $1,208    ($1,208)    -66.67%
                                                                $0     1.27%        $543       ($543)    -30.00%      1.27%        $815       ($815)    -45.00%     1.27%        $906       ($906)    -50.00%
                                     Maximum         $400 Million      1.11%        $543       ($543)    -30.00%      1.11%        $815       ($815)    -45.00%     1.11%        $906       ($906)    -50.00%
                                    Participation    $750 Million      0.98%        $543       ($543)    -30.00%      0.98%        $815       ($815)    -45.00%     0.98%        $906       ($906)    -50.00%
                                                        $1 Billion     0.88%        $543       ($543)    -30.00%      0.88%        $815       ($815)    -45.00%     0.88%        $906       ($906)    -50.00%

                                                                     PIT Tax    Homestead   NET TAX       %         PIT Tax    Homestead   NET TAX       %        PIT Tax    Homestead   NET TAX       %
                                                                     Increase   Exclusion   IMPACT      CHANGE      Increase   Exclusion   IMPACT      CHANGE     Increase   Exclusion   IMPACT      CHANGE
                                                                $0     0.91%        $570       ($479)    -26.46%      0.91%         $855      ($764)    -42.20%     0.91%         $951      ($860)    -47.44%
                                     Estimated
                                                     $400 Million      0.91%        $719       ($628)    -34.68%      0.91%       $1,004      ($913)    -50.42%     0.91%       $1,100    ($1,009)    -55.67%
                      Minimum PIT




                                     Minimum
                                                     $750 Million      0.91%        $850       ($759)    -41.88%      0.91%       $1,135    ($1,044)    -57.62%     0.91%       $1,230    ($1,139)    -62.87%
                        Increase




                                    Participation
PERSONAL INCOME TAX




                                                        $1 Billion     0.91%        $943       ($852)    -47.02%      0.91%       $1,228    ($1,137)    -62.76%     0.91%       $1,323    ($1,232)    -68.01%
                                                                $0     0.91%        $428       ($337)    -18.59%      0.91%        $642       ($551)    -30.39%     0.91%        $713       ($622)    -34.33%
                                     Maximum         $400 Million      0.91%        $540       ($449)    -24.76%      0.91%        $753       ($662)    -36.56%     0.91%        $825       ($734)    -40.50%
                                    Participation    $750 Million      0.91%        $637       ($546)    -30.16%      0.91%        $851       ($760)    -41.96%     0.91%        $922       ($831)    -45.90%
                                                        $1 Billion     0.91%        $707       ($616)    -34.01%      0.91%        $921       ($830)    -45.82%     0.91%        $992       ($901)    -49.75%

                                                                $0     0.87%        $725       ($638)    -35.21%      0.87%       $1,087    ($1,000)    -55.21%     0.87%       $1,208    ($1,121)    -61.88%
                                     Estimated
                                                     $400 Million      0.72%        $725       ($652)    -36.00%      0.72%       $1,087    ($1,015)    -56.00%     0.72%       $1,208    ($1,135)    -62.67%
                      Maximum PIT




                                     Minimum
                                                     $750 Million      0.60%        $725       ($665)    -36.69%      0.60%       $1,087    ($1,027)    -56.69%     0.60%       $1,208    ($1,148)    -63.36%
                        Increase




                                    Participation
                                                        $1 Billion     0.51%        $725       ($674)    -37.18%      0.51%       $1,087    ($1,036)    -57.18%     0.51%       $1,208    ($1,157)    -63.85%
                                                                $0     1.16%        $543       ($428)    -23.62%      1.16%        $815       ($700)    -38.62%     1.16%        $906       ($790)    -43.62%
                                     Maximum         $400 Million      1.01%        $543       ($442)    -24.41%      1.01%        $815       ($714)    -39.41%     1.01%        $906       ($804)    -44.41%
                                    Participation    $750 Million      0.89%        $543       ($455)    -25.09%      0.89%        $815       ($726)    -40.09%     0.89%        $906       ($817)    -45.09%
                                                        $1 Billion     0.80%        $543       ($464)    -25.59%      0.80%        $815       ($735)    -40.59%     0.80%        $906       ($826)    -45.59%




                                                                                                               31
SUMMARY / CONCLUSIONS
                                    Summary / Conclusions

•   Purposes of Act I:
     1. Forces 2007 tax-shifting referendum.
     2. Forces districts to increase earned income tax (EIT) or adopt a person income tax (PIT) to be
        used for homeowner tax reduction.
     3. Distributes part of Commonwealth gaming revenue to districts for homeowner tax reduction.
     4. Requires back-end voter referenda on future tax increases above an annual index.

•   Potential Winners under Act I:
     1. Elderly homeowners with no earned income (or personal income)
     2. Lower income homeowners

•   Potential Losers under Act I:
     1.   Renters
     2.   Higher income homeowners
     3.   Homeowners who do not file application
     4.   Elderly with significant personal income (if personal income tax adopted)




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